Three Critical In-plant Trends for 2010

I JUST returned from the Texas Association of College and University Printers (TACUP) conference and was pleasantly surprised at the turnout. After another in-plant show cancelled this year (ACUP), it was a nice surprise to see a roomful of in-plant managers.

According to Richard Beto who organized the meeting at the University of Texas at Austin, the cancellation of other shows helped attract managers from neighboring states to TACUP.

My presentation entitled "What Makes a World Class In-plant Printer" was delayed because we could not find the handouts. It took about 20 minutes for them to arrive, but it allowed time for everyone to talk about the issues on their minds.

Based on what I heard there, as well as during on-site audits over the last few years, I would conclude that there are three critical trends for in-plants to pay attention to: Sales/Marketing, Finance and Operations.

Marketing and Sales

Today's marketing and sales focus includes listening to your customers' changing needs and responding before someone else can create a competitive advantage. There are two components to listening and being responsive to your customers. First you have to understand how well you are meeting your customers' existing needs, and second you need to learn how your customers' needs are changing. In other words, you have to understand how you are doing today and what you will need to change in the future.

No one wants to admit it but the sad fact is that the need for print is declining and therefore the competition for print is increasing. As a result, the bar for service is being raised by all service providers to your customers.

Years ago an in-plant had an advantage just because employees wanted to keep the money in the "same pot." That advantage is declining as outside companies offer faster, cheaper or more convenient service, which often trumps the "same pot" advantage. As a result, it's not enough to simply survey customers about their satisfaction; instead you have to now compare your products and services to those of outside printers. We use a tool called the NAPL eKG competitiveness survey to accomplish that. It does not simply ask "How are we doing?" but instead "How do we compare?"

In another survey we call Market Pulse, we look ahead (as opposed to eKG, which looks at the present situation). Our goal is to learn about customers' changing needs (e.g. from direct mail to e-mail; from hand delivery of jobs and proofs to electronic delivery; from buying print alone to buying print, fulfillment and mailing together; from print marketing alone to cross media marketing, etc.). We also ask about service awareness (do you know we offer?) and likelihood of purchasing new products and services.

Together both tools give companies a 360-degree view encompassing both opportunities for improvement with existing products and services, as well as quantification of interest and a lead generation tool for new products and services.

Financial

If you have the opportunity to meet with in-plant managers in peer groups or at conferences, you will find that some talk about their need to cost justify their existence while others say that their current administration does not require that they demonstrate a break even; however, as the economy struggles, more and more companies with in-plants are looking for ways to cut expenses. As a result they are critically evaluating services not considered "core competencies," such as food services, transportation and the in-plant printing facility

Therefore, the new focus is to go beyond whatever is described in your current mission statement to a mission statement that is likely in your future. The mission statement in the future will include analyzing, tracking and benchmarking operational and financial performance. The measurement process and changes resulting from that process will help make in-plants less vulnerable to outsourcing.

Different organizations use different metrics. Some of the more common metrics to benchmark include:

• Budgeted Hourly Rates

• Total Cost of Operation

• Break-even Analysis

• Make vs. Buy Analysis

• Application Analysis

• Cost per Product

• Competitive Pricing

• Industry Ratios

The point here is that all in-plants should get a head start on measuring and tracking their financial and operational metrics and work on improving them—before you need to.

Operations

Today's operational focus includes increasing productivity to reduce costs and turnaround times, acting more "green" and overcoming the perception that printing is a dirty profession.

Increasing operation productivity has become one of the never-ending battles in print production today. The benefits include driving down the cost of manufacturing, speeding turnaround times, and more competitive prices (which I consider one of the handful of critical metrics to monitor).

Productivity and cost reductions can be achieved through process improvements or technologies. Although less expensive and rare, one strategy to increase productivity is to use continuous process improvement. That means critically evaluating how you are doing things and looking for a better way.

The automation of the print workflow using a PDF workflow solution is a good example of a technology solution. A PDF workflow starts with an estimate that was accepted as a bid and then sent to the service provider as a electronic file. The electronic file would carry all of the post press and printing information, such as number of pages, colors, paper stock, binding/collating parameters, folds, perforations and shipping data, as well as contain information about the copy, such as the images, text, color schemes and layout.

Furthermore, everyone who had a role in production would be able to access job information, such as the status of the job, who originated it, who has worked on it and who is next in the process, plus all the parameters of the original and all the color matching information. In the ultimate digital workflow many of the production steps would be automated, event-driven systems that would not require manual intervention.

Be A 'Green' Champion

The "green" momentum has become an unstoppable force, and it does not matter how big you are. Companies of all sizes are being affected. There are a few things we have found that help make the green movement a success. One common denominator we discovered was that most of these efforts had a green champion: a stakeholder charged with establishing, implementing and defending the initiatives throughout the company.

On projects that focus on going green, we have observed these five steps:

1) Reduce spoilage/waste and increase recycling.

2) Conserve energy and use renewable resources.

3) Test, master and offer alternative manufacturing materials.

4) Audit chemical usage, work with regulatory bodies and test alternatives.

5) Measure, publish and market your actions.

Summary

The trends affecting in-plants are universal. It does not matter if you're a government, enterprise or an educational in-plant printer.

Financially, you should measure and compare your operational and financial numbers to industry leaders. Operationally, you need to constantly improve productivity and your "greening" efforts, as well as work toward overcoming the perception that print is a dirty profession. And last but not least, if you want to increase your value you have to start listening and being responsive to your customers' changing needs. IPG

NAPL Senior Consultant Howard Fenton works with both commercial printers and in-plants to conduct audits that benchmark operational and financial performance metrics. The focus is to measure and benchmark performance to industry leaders, recommend strategies and coach them on how to become an industry leader. For more information call (201) 523-6328 or contact him via e-mail at: hfenton@napl.org